## Price and Wage Flexibility in Hong Kong SAR

_IMF Working Papers, January 20, 2017_

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## Bibliographic details
- Authors: Si Guo
- Published: January 20, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475570397.001

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### Overview and purpose
- Assesses price and wage flexibility in Hong Kong SAR.
- Compares Hong Kong SAR with the United States, the United Kingdom, and Singapore.
- Analysis conducted at two levels:
  - Aggregate: examines three commonly used macroeconomic relationships among inflation, unemployment, wage growth, and output fluctuations.
  - Industry: compares distributions of labor earnings and price growth in Hong Kong SAR and the United States, and estimates a model of wage formation under downward nominal wage rigidity.

### Key findings
- Broad conclusion: price and wage adjustments are more flexible in Hong Kong SAR than in the comparator economies (United States, United Kingdom, Singapore).
- Industry-level evidence: distributional comparison of labor earnings and price growth indicates greater flexibility in Hong Kong SAR relative to the United States.
- Wage formation model: estimation under downward nominal wage rigidity shows Hong Kong SAR exhibits greater wage flexibility than the United States.

### Methodology highlights
- Aggregate comparisons based on three common macroeconomic relationships linking:
  - Inflation
  - Unemployment
  - Wage growth
  - Output fluctuations
- Industry analysis compares distributions of labor earnings and price growth.
- Empirical estimation of a wage formation model incorporating downward nominal wage rigidity for cross-country comparison.

### Publication and metadata
- Author: Si Guo
- Date: January 20, 2017
- Series: IMF Working Papers
- Working Paper No.: 2017/009
- Issue: 009
- Pages: 19
- DOI: https://doi.org/10.5089/9781475570397.001
- ISBN: 9781475570397
- ISSN: 1018-5941
- Subjects: Labor, Labor markets, Price adjustments, Prices, Wage adjustments, Wages
- Keywords: Census and Statistics Department of Hong Kong SAR; earnings growth; earnings statistics; equilibrium wage growth in industry; flexibility; flexibility in Hong Kong SAR; Hong Kong SAR; inflation; labor earnings growth; Labor markets; nominal wage; Price adjustments; wage; Wage adjustments; wage growth; wage rigidity; wage system; Wages; WP

*IMF Working Paper: "Price and Wage Flexibility in Hong Kong SAR" (Si Guo), IMF Working Papers 2017, 009.*

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_Source: https://www.imf.org/en/publications/wp/issues/2017/01/20/price-and-wage-flexibility-in-hong-kong-sar-44556_